United States of America (ex rel), et al v. Westchester County, New York

Filing 389

OPINION & ORDER re: 348 MOTION to Intervene filed by Anti-Discrimination Center: ADC's May 31, 2011 motion to intervene is denied. (Signed by Judge Denise L. Cote on 1/4/2012) (ab)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
----------------------------------------X
:
UNITED STATES OF AMERICA ex rel., ANTI- :
DISCRIMINATION CENTER OF METRO NEW
:
YORK, INC.,
:
Plaintiff/Relator, :
:
-v:
:
WESTCHESTER COUNTY, NEW YORK,
:
Defendant.
:
:
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APPEARANCES:
For intervenor:
Robert H. Stroup
Levy Ratner, P.C.
80 Eighth Avenue, 8th Floor
New York, NY 10011
Craig Gurian
Anti-Discrimination Center, Inc.
54 West 21st Street, Suite 707
New York, NY 10010
For plaintiff:
Benjamin H. Torrance
Assistant United States Attorney
86 Chambers Street
New York, NY 10007
For defendant:
Robert F. Meehan
Westchester County Attorney
148 Martine Avenue, 6th Floor
White Plains, NY 10601

06 Civ. 2860 (DLC)
OPINION & ORDER

DENISE COTE, District Judge:
The Court exercises continued jurisdiction over this action
pursuant to a consent decree between the United States (“the
Government”) and Westchester County, New York (“Westchester” or
“the County”).

The Anti-Discrimination Center of Metro New

York, Inc. (“ADC”) has moved to intervene, for the stated
purpose of “enforcing” that consent decree.

For the following

reasons, ADC’s motion is denied.

Background
I.

The False Claims Act Litigation
ADC is a non-profit organization that advocates for

policies to combat discrimination in housing, employment,
education, and public accommodation.

In 2006, ADC brought suit

as relator for the Government against Westchester, alleging that
Westchester violated the False Claims Act, 31 U.S.C. § 3729, et
seq. (“FCA”), through certifications made to the Secretary of
Housing and Urban Development (“HUD”) between April 2000 and
April 2006 to obtain over $52 million in federal funding for
housing and community development.

In essence, Westchester had

successfully applied for HUD Community Development Block Grants
(“CDBG”), and in doing so had certified to HUD that it was
affirmatively furthering fair housing (“AFFH”), see 42 U.S.C. §§
5304(b)(2), 12705(b).

In order to fulfill its obligation to

2

AFFH, however, Westchester was required to perform an analysis
of impediments (“AI”) to fair housing in its jurisdiction,
taking into account the impact of race on housing opportunities
and choice, and to take appropriate action to overcome the
effects of those impediments.
On February 24, 2009, the Court granted partial summary
judgment to ADC, finding that Westchester had falsely certified
to HUD that it was fulfilling its commitment to AFFH while
failing to analyze impediments to fair housing in the County
related to race.

See United States ex rel. Anti-Discrimination

Center of Metro New York, Inc. v. Westchester County, 668
F.Supp.2d 548, 561-63 (S.D.N.Y. 2009).

Both ADC’s and

Westchester’s summary judgment motions were denied, however, on
the issue of whether the County had knowingly submitted false
certifications to HUD.

Id. at 567-68.

A trial date was set.

On May 5, the trial date was adjourned after the Court was
informed that the Government, ADC, and Westchester had
memorialized the framework for a settlement of claims against
the County.
On August 10, 2009, the Government exercised its statutory
right, see 31 U.S.C. § 3730(c)(3), and filed its complaint in
intervention.

Alongside its FCA claims, the Government alleged

violations of the Housing and Community Development Act
(“HCDA”), 42 U.S.C. § 5301 et seq., seeking mandatory and

3

injunctive relief against Westchester.

At the same time, the

Government submitted two settlement stipulations.

The first, a

consent decree between the Government and the County (the
“Consent Decree”), dismissed the FCA claims against the County.
The ADC is not a party to the Consent Decree.

The second

settlement stipulation, entitled “Stipulation and Order of
Settlement of Relator’s Share and Release” (“ADC Release”), was
between the Government and the ADC.

In the ADC Release, the ADC

accepted a relator’s award of $7.5 million, agreed that the
Consent Decree was “fair, adequate, and reasonable,” and
released the Government from claims relating to the allegations
in the ADC’s FCA complaint.

II.

The Consent Decree
The Consent Decree established a framework for ensuring

that the County would comply with its obligations under the Fair
Housing Act to AFFH.

This Court has retained jurisdiction over

the Consent Decree and the parties to it, including any
application to enforce provisions of the Consent Decree.

Under

the Consent Decree, the County agreed to pay $30 million to the
Government to settle the monetary claims against it under the
FCA.

Of that amount, $21.6 million would be deposited in the

County’s account with HUD, to be made available to the County
for the development, consistent with the terms of the Consent

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Decree, of new affordable housing units that will AFFH in the
County.

Westchester agreed to pay ADC $2.5 million as expenses,

attorney’s fees, and costs in full settlement of the ADC’s qui
tam claims against the County.
The County also undertook to allocate an additional $30
million for fiscal years 2009 through 2014 to comply with the
Consent Decree.

The core provision of the injunctive relief set

forth in the Consent Decree is Westchester’s commitment to
develop at least 750 new affordable housing units in areas of
the County with low black and Hispanic populations (“the
Affordable AFFH units”) in the seven years following the entry
of the Consent Decree.

The County “shall use all available

means as appropriate” to develop the Affordable AFFH units, and,
[i]n the event that a municipality does not take
actions needed to promote the objectives of [the
commitment to develop the Affordable AFFH units], or
undertakes actions that hinder the[se] objectives . .
. the County shall use all available means as
appropriate to address such action or inaction,
including . . . pursuing legal action.
The Consent Decree provides for the appointment of a
monitor (the “Monitor”) to review the County’s progress toward
the Consent Decree’s benchmarks, and to take steps as necessary
to ensure compliance.

The Monitor’s powers include the

authority to review County actions for compliance with the
Consent Decree, to recommend additional actions the County
should take to ensure compliance, and to resolve disputes

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between the Government and Westchester regarding the
implementation of the Consent Decree.1

The Consent Decree

provides for monetary sanctions against the County in the event
the County does not fulfill its obligation to develop the
Affordable AFFH units as specified in the Consent Decree, or
fails to meet interim benchmarks.

The Monitor is given

discretion to waive or alter the imposition of these penalties.
From August 10, 2009, James E. Johnson has served as the
Monitor.
The Consent Decree requires that the County submit, within
120 days of entry of the Consent Decree, an implementation plan
(“IP”) detailing with specificity how the County intends to
implement its commitment to develop the Affordable AFFH units.
The Monitor must review the proposed IP, and “in the Monitor’s
discretion . . . accept or reject the proposed plan.”

If the IP

is rejected, the Consent Decree provides for an additional
period where the County must seek to cure its IP in response to
the deficiencies identified by the Monitor.

Then, “[i]n the

event that the Monitor deems the revised plan submitted by the
1

Pursuant to the Consent Decree, in the event of a dispute
between the County and the Government, the parties must notify
the Monitor in writing of the nature of the dispute. The
Monitor must then issue a written report and recommendation to
the parties addressing the dispute. Either party may seek
additional review of the Monitor’s report and recommendation
from the magistrate judge assigned to this case, and ultimately
from the Court.

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County insufficient to accomplish the objectives and terms set
forth in [the Consent Decree], the Monitor shall specify
revisions or additional items that the County shall incorporate
into its [IP].” The County’s IP must include a “model ordinance”
that the County will promote to municipalities to advance fair
housing by ensuring that new development projects include
affordable units and are marketed to minority communities.
The Consent Decree also requires that the County complete
an AI compliant with HUD’s Fair Housing Planning Guide.
must be deemed acceptable by HUD.

The AI

The County must then take all

actions identified in its AI.
Commencing on December 31, 2011, the Monitor must complete
a biennial report assessing the County’s efforts and progress to
meet its commitments under the Consent Decree.

As part of the

report’s assessment of the County’s record of compliance,
the Monitor may consider any information appropriate
to determine whether the County has taken all possible
actions to meet its obligations . . . including . . .
exploring all opportunities to leverage funds for the
development of Affordable AFFH Units, promoting
inclusionary and other appropriate zoning by
municipalities by offering incentives, and, if
necessary, taking legal action.

III.

Implementation of the Consent Decree
The County has thus far failed to develop an IP acceptable

to the Monitor or submit an AI acceptable to HUD.

After being

granted an extension, as permitted under the Consent Decree, the

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County submitted its first IP to the Monitor and HUD on January
29, 2010 (“the January 2010 IP”).

The Monitor found the January

2010 IP to be unacceptable, lacking “specificity with respect to
accountability, timeframes, and processes.”

The County’s

revised IP, submitted on March 12, 2010, was also rejected by
the Monitor.

The County submitted its second revised IP on

August 9, 2010 (“the August 2010 IP”).

In October 2010, the

Monitor approved the “model ordinance” contained in the August
2010 IP, but, pursuant to the Consent Decree, the Monitor
undertook to direct revisions to the August 2010 IP to render it
compliant.

In late 2010, the Monitor “established an approach

to develop and complete the IP’s remaining components
[involving] obtaining input from major Stakeholders in the
[Consent Decree], not just the parties.”

That process remains

ongoing.
The County’s AI submissions have been rejected on repeated
occasions by HUD.2

The most recent rejection of the County’s AI

occurred on July 13, 2011, when HUD rejected the County’s June
13 revised AI submission (“the June 2011 AI”).

In particular,

HUD found that the County had not passed legislation against
source-of-income discrimination (“Source of Income
Legislation”), as the Consent Decree required it to do, and that

2

The Consent Decree does not give the Monitor a central role in
the AI submission process, as it does for the IP process.
8

the County had not yet developed a legal strategy to challenge
exclusionary zoning practices utilized by municipalities.
Following the rejection of the June 2011 AI, the Government
and the County requested that the Monitor resolve two disputes:
first, whether the County has complied with the Consent Decree
in promoting Source of Income Legislation; and second, “the
nature and scope of the County’s duty to address local zoning
ordinances that may hinder efforts to [AFFH],” and how that duty
should be addressed in its AI.

The Monitor, in a November 17

Report and Recommendation (the “November 17 Report”), found the
County in breach of its obligation to promote Source of Income
Legislation and directed the County to analyze municipal zoning
ordinances in connection with its AI by February 29, 2012.

The

County has sought review of the November 17 Report from the
magistrate judge assigned to this case.
Since entry of the Consent Decree, ADC has lobbied the
Government, the County, and the Monitor on behalf of ADC’s fair
housing goals.

It now seeks to intervene in the remedial stages

of this action to “enforce” the Consent Decree.

Discussion
ADC filed two motions on May 31, 2011.

First, it moved for

intervention as of right under Fed. R. Civ. P. 24(a).

Second,

it moved for Court enforcement of provisions of the Consent

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Decree, alleging in essence that the County had failed to comply
with the Consent Decree and the Government and Monitor had
abdicated their responsibility to enforce it.

At a conference

held on June 7, the Court scheduled briefing on the motion to
intervene and denied ADC’s motion to enforce the Consent Decree
without prejudice for refiling after resolution of the
intervention motion.

Both the Government and the County

separately opposed ADC’s motion to intervene.

The motion became

fully submitted on September 16.
Rule 24(a)(2) provides:
On timely motion, the [district] court must permit
anyone to intervene who . . . claims an interest
relating to the property or transaction that is the
subject of the action, and is so situated that
disposing of the action may as a practical matter
impair or impede the movant’s ability to protect its
interest, unless existing parties adequately represent
that interest.
Fed. R. Civ. P. 24(a)(2).

Intervention as of right is granted

when the movant meets the following four conditions:
(1) the motion is timely; (2) the applicant asserts an
interest relating to the property or transaction that
is the subject of the action; (3) the applicant is so
situated that without intervention, disposition of the
action may, as a practical matter, impair or impede
the applicant's ability to protect its interest; and
(4) the applicant's interest is not adequately
represented by the other parties.
MasterCard Int’l Inc. v. Visa Int’l Serv. Ass’n, Inc., 471 F.3d
377, 389 (2d Cir. 2006).

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The requirements for intervention must also be read in
connection with the definition of a necessary party in Rule
19(a), Fed. R. Civ. P.

Rules 24(a)(2) and 19(a) “are intended

to mirror each other.”

MasterCard, 471 F.3d at 390.

A party is

“necessary” if it “claims an interest relating to the subject of
the action and is so situated that the disposition of the action
in the [party]'s absence may as a practical matter impair or
impede the [party]'s ability to protect that interest.”
Civ. P. 19(a)(2)(i).

Fed. F.

Thus, “[t]he requirements for intervention

embodied in Rule 24(a)(2) must be read . . . in the context of
the particular statutory scheme that is the basis for the
litigation and with an eye to the posture of the litigation at
the time the motion is decided.”

United States v. Hooker Chem.

& Plastics Corp., 749 F.2d 968, 983 (2d Cir. 1984).

“If a party

is not ‘necessary’ under Rule 19(a), then it cannot satisfy the
test for intervention as of right under Rule 24(a)(2).”
MasterCard, 471 F.3d at 389.
The parties dispute whether ADC’s motion is timely.
Because ADC has failed to show that its interest in the Consent
Decree between the Government and the County is sufficient to
support intervention as of right, the timeliness of ADC’s motion
need not be addressed.
For an interest in the underlying action to be cognizable
by Rule 24(a)(2), “it must be direct, substantial, and legally

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protectable.”

Bridgeport Guardians v. Delmonte, 602 F.3d 469,

473 (2d Cir. 2010) (citation omitted).

“An interest that is

remote from the subject matter of the proceeding, or that is
contingent upon the occurrence of a sequence of events before it
becomes colorable, will not satisfy the rule.”

Brennan v.

N.Y.C. Bd. of Educ., 260 F.3d 123, 129 (2d Cir. 2001) (citation
omitted).
ADC sets forth three interests in the Consent Decree
between the Government and the County that entitle it to
intervention as of right.

None is sufficient to conclude that

it is a necessary party to this action or that it has a direct
and legally protectable right in the enforcement of the Consent
Decree.
First, ADC argues that but for its diligence in prosecuting
the initial FCA action as relator for the Government, there
would be no Consent Decree and no commitment by the County to
AFFH.

ADC’s role as relator in initiating the qui tam action

does not provide it with an ongoing legally protectable interest
in the litigation.
The FCA “is designed to help combat fraud against the
federal government by persons who provide goods and services to
it,” and to that end, includes “qui tam provisions that allow
private citizens who learn of fraud to bring suit in the name of
the government and to share in any recovery.”

12

United States ex

rel. Kirk v. Schindler Elevator Corp., 601 F.3d 94, 98-99 (2d
Cir. 2010), rev’d on other grounds, 131 S.Ct. 1885 (2011).
While a relator does have an interest sufficient to support
Article III standing, that interest is limited and bounded by
the particular structure of FCA litigation.

“[T]he Supreme

Court [has] specifically identified the source of relatorstanding in False Claims Act qui tam actions, concluding that
relators have standing to sue not as agents of the United
States, but as partial-assignees of the United States’ claim to
recovery.”

United States ex rel. Eisenstein v. City of New

York, 540 F.3d 94, 101 (2d Cir. 2008) (citing Vermont Agency of
Natural Resources v. United States ex rel. Stevens, 529 U.S.
765, 773-74 (2000)).

While the statute effects a partial

assignment of the claim to the relator, “the injury, and
therefore, the right to bring the claim belongs to the United
States.”

United States ex rel. Mergent Serv. v. Flaherty, 540

F.3d 89, 93 (2d Cir. 2008).

“While relators indisputably have a

stake in the outcome of . . . qui tam actions they initiate, the
Government remains the real party in interest in any such
action.”

Id. (citation omitted).3

3

The FCA statute enables the

Recognizing that “the case, albeit controlled and litigated by
the relator, is not the relator’s ‘own case’ as required by [the
federal pro se statute], nor one in which he has ‘an interest
personal to him,’” the Second Circuit has held that a relator
may not bring an FCA claim pro se. Flaherty, 540 F.3d at 93
(citation omitted).
13

Government to defend its predominant interest and assert control
over the claim at various stages of the litigation.

Numerous

FCA provisions “protect the government’s ability to maintain
control of cases in which it is pursuing an investigation or
otherwise wishes to assert its own interests against those of
the qui tam relator.”

Schindler Elevator, 601 F.3d at 110 n.9.

ADC brought a qui tam action against the County through a
partial assignment of the Government’s interest in the FCA
claims asserted.

In August 2009, the Government intervened and,

consistent with its status under the FCA as the real party in
interest, settled the FCA claims against the County.

Pursuant

to that settlement, ADC received a relator’s bounty of $7.5
million.

ADC stipulated at that time that the Government’s FCA

settlement with Westchester was “fair, adequate, and reasonable
under all the circumstances.”

See 31 U.S.C. § 3730(c)(2)(B).

The Court’s approval of the settlement terminated the FCA claims
against Westchester, and ADC’s role in the action.

ADC cannot

satisfy Rule 24(a)’s requirement that ADC have a legally
protectable interest by reference to an interest that did not
survive approval of the settlement.
Second, ADC argues that its organizational purpose -“ending segregation [] in Westchester and elsewhere” -constitutes a sufficient interest for intervention as of right.
ADC’s interest in combating segregation does not make it a

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necessary party to the process in which the Government and
Westchester are currently engaging.

ADC is not a party to the

Consent Decree between the Government and Westchester.
Furthermore, the Consent Decree, which ADC seeks to “enforce”,
provides for injunctive relief pursuant to the HCDA.

ADC could

not have brought an HCDA claim or secured the injunctive relief
against the County.

See 42 U.S.C. § 5311 (establishing HCDA

enforcement scheme through HUD referral to Attorney General).4
ADC filed its action as a relator under the FCA, and those
causes of action were fully resolved by the settlement and do
not survive.
Thus, ADC has no greater status than any other stranger to
this litigation.

Pursuant to the mechanisms established by the

Consent Decree, the Monitor issued his November 17 Report; the
4

A HUD referral to the Attorney General to initiate an
enforcement action of that part of the HCDA which pertains to
CDBG grants is the exclusive means of enforcement. See 42
U.S.C. §§ 5304(b)(2), 5311; accord Greater New Orleans Fair
Housing Action Ctr. v. United States Dep’t of Housing and Urban
Dev., 723 F.Supp.2d 14, 24-26 (D.D.C. 2010). A plaintiff
seeking to enforce a statute through either an implied right of
action or § 1983 must first demonstrate that “Congress intended
to establish a federal right.” Gonzaga v. Doe, 536 U.S. 273,
283 (2002). “[T]he question whether Congress intended to create
a private right of action is definitively answered in the
negative where a statute by its terms grants no private rights
to any identifiable class. For a statute to create such private
rights, its text must be phrased in terms of the persons
benefited.” Id. at 283-84 (citation omitted). The HCDA
provision governing AFFH certifications to HUD for CDBG grants,
42 U.S.C. § 5304(b)(2), is not phrased in terms of a beneficiary
class. Rather, it sets forth terms under which a grantee may
receive funding from HUD.
15

magistrate judge is currently reviewing Westchester’s objections
to that report.

Nothing in the Consent Decree confers upon ADC

any role in this particular process or in the enforcement of the
Consent Decree generally.

Given the procedural posture of this

case -- in its remedial stages with remaining conflicts resolved
through the mechanisms established by the Consent Decree –- ADC
has no legally protectable interest in the Consent Decree to
support intervention.
Nor can ADC bootstrap its intervention motion by moving to
enforce the Consent Decree and thereby creating the ongoing
litigation in which it would then intervene.

ADC does not have

standing to initiate such litigation.
“To have standing, a plaintiff must demonstrate an
actual and imminent, not conjectural or hypothetical
threat of a concrete and particularized injury in fact
that is fairly traceable to the challenged action of
the defendant and that a favorable judicial decision
will likely prevent or redress.”
New York Civil Liberties Union v. N.Y.C. Transit Auth., 652 F.3d
247, 255 (2d Cir. 2011) (citation omitted).

An organization can

establish standing either by showing that “some particular
member of the organization would have had standing to bring the
suit individually,” or else in its own right, in which case the
organization “itself must meet the same standing test that
applies to individuals.”

Id. (citation omitted).

16

ADC has not

shown that it has standing to initiate litigation for the
alleged lax enforcement of the Consent Decree.
ADC relies principally upon Sagebrush Rebellion, Inc. v.
Watt, 713 F.2d 525 (9th Cir. 1983), for the proposition that “a
public interest group [i]s entitled as a matter of right to
intervene in an action challenging the legality of a
[government] measure it ha[s] supported.”

Id. at 527.

In

Sagebrush Rebellion, an organization dedicated to multiple use
management of public lands challenged the legality of actions
taken by the Secretary of the Interior to conserve acres of
public land.

Id. at 526-27.

The Ninth Circuit permitted the

Audubon Society to intervene based on its interest in the
preservation of birds and their habitats.

Id. at 528; see also

Prete v. Bradbury, 438 F.3d 949, 954 (9th Cir. 2006).
Sagebrush Rebellion is inapposite.

It did not address a

relator’s surviving interest in a consent decree.

Even if one

accepts its statement that the right to intervene extends to
organizations that supported government action whose legality is
challenged in litigation,5 that principle is of little benefit to
ADC.

The legality of the Consent Decree is not at stake here.

5

Given the marginal relevance of Sagebrush Rebellion to the
issues raised by this motion, it is unnecessary to explore
whether its holding represents an accurate statement of the
reach of Rule 24 in this circuit.
17

Both the Government and the County continue to be bound by its
provisions, and neither purports to argue otherwise.
ADC’s reliance upon Trbovich v. United Mine Workers, 404
U.S. 528 (1972), is similarly misplaced.

In Trbovich, no party

chose to dispute before the Supreme Court the intervenor union
member’s interest in his union’s election procedures; rather,
the parties disputed whether there was adequacy of
representation by the Secretary of Labor.

Id. at 538.

Finally, and for the first time in its reply papers, ADC
asserts that it seeks to “invest in the development of housing
in Westchester that would require elimination of exclusionary
zoning barriers.”

Arguments raised for the first time in a

reply memorandum are waived and need not be considered.

See

Connecticut Bar Ass’n v. United States, 620 F.3d 81, 91 n.13 (2d
Cir. 2010); Cioffi v. Averill Park Central School Dist. Bd. of
Educ., 444 F.3d 158, 169 (2d Cir. 2006).6

6

ADC has not explained why it waited until its reply
this third argument. Its contention that it seeks to
housing in Westchester is premised on letters it sent
Westchester and Westchester municipalities in January
18

to make
invest in
to
2011.

Conclusion
ADC's May 31, 2011 motion to intervene is denied.
SO ORDERED:
Dated:

New York, New York
January 4, 2012

Uni

District Judge

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